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The ROI Question

Return on Investment for social media. It’s the question asked at every conference I’ve attended over the past year, and I have yet to hear someone pipe up with a concrete example of an ROI approach that clearly and unambiguously proves a financial return on social media. And yet there’s a sense that demonstrable proof of ROI is a precondition for investment in staffing and relevant expertise, the lack of which were cited as stumbling blocks by a majority of the institutions responding to the recent CASE social
media survey.

Nobody questions the importance of cost, measurement, and data-driven decision making, especially in this economic climate. The “New Normal” is a place with few luxuries. But a look at some broader trends shaping the advancement environment suggests to me that ROI is too narrow a focus to be the sole factor determining whether and how much to invest in social media. The important numbers are the ones that tell us where our constituencies are and what they’re doing.

Increasing rates of usage. According to a recent Nielsen study, time spent on social networking sites by American adults grew by almost 50% from June 2009 to June 2010. 23% of time online is now spent using social media, an average of six hours each month. On some platforms, use
is even heavier. As of May, users spent 8.3 billion hours on Facebook each month, an average of almost an hour a day.

These trends converge. What we’re seeing is rapid, global, increasingly intense adoption and use of social networking platforms that seem likely to be used even more heavily on the next major emerging medium, the mobile web. These numbers make a compelling case that if we focus too much on short-term dollars-and-cents ROI, we may not ask a more interesting and important question: what will happen to our engagement and fundraising efforts if we don’t position ourselves proactively in response to these trends? The current tone of the conversation evokes mid-1990’s deliberations about whether or not organizations ought to jump on the bandwagon of the latest fad, the Internet. 15 years later, those debates seem naïve. As Andy Shaindlin wrote on Alumni Futures, “ (O)nline networks are part of the fabric now, they’re what people do. They are as critical to many
businesses as telephone service is. Online community is not an experiment or a half-measure to make up for the fact that people won’t read your direct mail pieces.”

This is not to suggest that we shouldn’t invest time, thought, and effort in measuring and assessing our efforts in social media. We should share our successes and techniques with each other. But we should do so from the vantage point of making our efforts more efficient and effective. This perspective includes, but is in no way limited to, making an impact on our bottom line. The trends identified above make it clear that the world is evolving rapidly. To ignore the numbers that tell us where society is going in favor of a narrow focus on short-term, financial ROI would be a serious risk for organizations dependent on creating and cultivating relationships.

Our constituents are already in new spaces and places. If we want to stay connected to them, we need to be where they are. It’s a cost of doing this business.